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Key Banks, Clearing and Trading Firms to Support NLX

The likes of BNP Paribas, Newedge, DRW Trading and Getco Europe said they plan to contribute liquidity and open interest to Nasdaq OMX's NLX platform to create a competitive market for short and long-term interest rate derivatives.

Nasdaq OMX said it has secured the support of a wide range of founding participants including banks, clearing, brokerage and trading firms who will contribute to liquidity and open interest at NLX, a new London-based derivatives market ahead of its launch.

Yesterday, NasdaqOMX and LCH.Clearnet announced that NLX had gained regulatory approval.

[For more on Nasdaq OMX, LCH.Clearnet Gain Regulatory Approval to Launch NLX, see Ivy Schmerken's related story.]

Key participant banks and clearing firms include: BNP Paribas, Citi, GH Financials Ltd, Nomura, The Royal Bank of Scotland Plc and UBS, according to today’s announcement.

Key participant brokerage and trading firms include: DRW Trading Group, Financial Market Engineering Ltd, Getco Europe Ltd, The Kyte Group Ltd, Marex Financial Ltd, MET Traders Ltd, Newedge, O.S.T.C. Ltd and Tower Trading Group Ltd.

"UBS has worked closely with NLX in development of this strategic partnership", stated Mike du Plessis, Global Co-Head of ETD Agency Execution at UBS. "NLX brings competition to interest rate derivatives in Europe and the ability to trade and clear a selection of contracts on one low cost market, which have traditionally traded and cleared on two separate platforms. With new regulations coming into force globally, we are keen that market infrastructure evolves to help our clients adapt in the most efficient way. NLX offers efficiency through low fees and the ability to clear all products through one clearing house, creating margin and collateral savings."

NLX is covering both short-term interest rate (STIRs) and long-term interest rate (LTIRs) euro- and sterling-based listed derivative products, which participants said have traditionally traded and cleared on two separate platforms. Market participants will have the ability to trade futures in 3-month EURIBOR, 3-month Sterling, Long Gilt, 2-year Schatz, 5-year Bobl and 10-year Bund on a single market underpinned by NASDAQ OMX infrastructure. Trades will clear through a horizontal clearing model, creating portfolio margining opportunities with the full suite of products at LCH.Clearnet, according to the release.

"NLX provides an attractive new market to trade interest rate derivatives", commented Nicolas Breteau, CEO at Newedge, a global firm in multi-asset brokerage and clearing. "Competitive fees and low-latency, built on respected and well known infrastructure offer new trading opportunities. We look forward to being an active participant in the market."

"Regulatory change is driving the need for us to look closely at how we create capital efficiency in all parts of our business", said Adrian Averre, Global Head of G10 Flow Rates Trading at BNP Paribas. "NLX has the potential to create significant margin savings in the short, medium and long-term, which enables our clients to invest those savings into growth activities that support the global economic recovery and higher returns."

"As rates traders who use futures to hedge risk exposure, we are delighted to have a complementary new interest rate derivatives market in which to trade", said Simon Wilson, Global Head of Algorithmic Rates Trading at The Royal Bank of Scotland. "NLX with its unique structure for trading and clearing both ends of the curve on a single market and reduced execution fees can provide significant savings for our rates trading activity."

Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio

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